Edison Issues ADR Update on Rare Earth Minerals

Jan 20, 2016, 04:08 ET from Edison Investment Research

LONDON, January 20, 2016 /PRNewswire/ --

Contrary to current sentiment surrounding the mining industry is the realistic positive outlook for lithium. The electric vehicle (EV) market has experienced heightened interest despite a more than halving of the oil price over the past year, helped in no small part by North American EV evangelists and by the Volkswagen (VW) scandal. The latter has already caused the automaker to unveil new, purer clean-tech vehicles to help recover its brand image. In our opinion, lithium supply risk may not be correctly factored into the ambitious plans of EV automakers, which should be recognized as a positive for investment into the lithium mining subsector.

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Our previous base case valuation was for the Sonora Lithium Project, for which REM commissioned its own LCE-based scoping study. This will be superseded initially by BCN's PFS in Q116, and then by a BFS. We therefore suspend our valuation and await the release of the PFS to revisit our forecasts relating to the development of the Sonora Lithium Project. We will also seek to address the potential value of REM's stake in the Yangibana rare earths project held in JV with Hastings Rare Metals, on release of that PFS, also expected during Q116.

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Edison Investment Research,

Charles Gibson
Edison Investment Research

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